Six Life Insurance Risk Factors
Whether you are shopping for high risk life insurance, special risk life insurance, or even simple term life insurance, there are several risk factors that the company is going to take into account when working out your plans and premiums. The key to getting life insurance prices is knowing what exactly is taken into account and how much it affects you. This article outlines the six main life insurance risk factors that top life insurance companies will take into account when deciding how much to charge you.
Age and Gender
Out of all the risk factors listed here, this one is going to do the most to determine the level of life insurance benefits you can get and how much you are going to have to pay for them. Unfortunately, there is also nothing you can do about it.
Statistically, a younger person will get lower rates because they are likely to be paying their premiums for many years before the insurance company is going to end up paying out your benefits. Senior life insurance plans, unfortunately, are designed around the sad fact that the older you are, the fewer years you are likely to have left.
Unfortunately, the same thing is true when it comes to your gender. Statistically, women have a longer lifespan than men, which results in lower life insurance prices for them.
Your Job
Though it may not seem to be an important factor, this is one of the main things that life insurance companies are going to ask about when designing your plan. If you are in a dangerous job or one that requires quite a bit of driving, you are going to be steered more toward a high risk life insurance option simply because of the higher likelihood that something may happen to you as opposed to someone who works in an office.
The same will be true if you have a job that is highly stressful. High levels of stress are likely to result in all manner of medical problems and other risk factors, such as obesity, high blood pressure, and other forms of heart disease.
Smoking Habits
You will likely find that it is impossible to find a cheap life insurance policy if you are, or recently have been, a smoker. The overwhelming evidence linking smoking to quite a few medical conditions, many of them terminal, is a huge red flag for life insurance companies. If you are a smoker, the best thing you can do to help lower your rates, as well as improve your health, is to stop smoking as soon as possible. Depending on the company, you may have a six month or one year waiting period before your rates begin to drop.
Your and Your Family’s Medical History
One of the first things that life insurance companies are going to look at is not only your current health status, but also your family medical history. If you are suffering from obesity, heart disease, or any other chronic medical condition, you are going to have higher life insurance premiums than someone who is healthy would have.
The same is true when it comes to your family medical history. Many medical conditions are hereditary, and looking at your family medical history gives the life insurance company an idea of the maladies that you are likely to face later on in life.
Driving Record
Life insurance rates are going to vary quite a bit depending on your driving history. Just like your auto insurance rates, you are going to find that you can receive a much lower premium if you have shown with your driving record that you are a safe, careful driver.
Though speeding and parking tickets are going to drive your rates up somewhat, you are going to want to avoid receiving any DUIs. A DUI indicates a flagrant disregard for the safety of not only the driver, but the passengers and other drivers as well. If you have one or more of these, high risk life insurance may be all that is available to you.
Hobbies
Depending on the hobbies you partake in, high risk life insurance may be all that is left available to you. If you spend your time rock climbing, motorcycle racing, or engaging in any other highly dangerous activities, the odds of an accident occurring are dramatically higher than someone who spends their time reading books or watching TV.
Sometimes the questionnaire you have to fill out will ask if you have or will partake in such activities within three months of the current date. If you know that you will at some point, but not within that time frame, you may be able to get standard life insurance instead of high risk life insurance and receive much lower premiums or more coverage.
You will want to make absolutely sure that you keep to what you write on the questionnaire, otherwise they will be unlikely to pay out benefits if something goes terribly wrong.
There are, of course, several other risk factors that can point you toward high risk life insurance instead of one of the other types of life insurance policies that are offered. The main thing a life insurance broker is going to ask him or herself when completing your application is, “Are we likely to have to pay out on this policy?”
Life insurance plans and premiums are based around maximizing profit for the company, so they are going to offer better deals for those people who are at low risk of dying. While there is nothing you can do about some of them, there are always things you can do to not only lower your premiums, but to live a safer and healthier life in general.
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